Monetary Policy and Economic Growth of Nigeria ( 1981 - 2012 )

Udude Celina C.

doi:10.12816/0011194

Article Details

Monetary Policy and Economic Growth of Nigeria ( 1981 - 2012 )

Authors:

Udude Celina C.

Publisher:

Centre for Social Science Research

Main Topics:

Economics and Finance

Journal:

Journal of Policy and Development Studies 2014 Vol.9 Issue 1, pp.234-247

Document Type:

Article

Publication Date:

11/2014

Document Language:

English

Document ID (Org No.):

63625

Frequency:

Quarterly

pISSN:

15979385

DOI:

10.12816/0011194

Descriptors:

Keywords:

Abstract:

 This study examined the impact of monetary policy on the growth of Nigeria economy betweenthe period of 1981 and 2012 with the objective of finding out the impact of various monetarypolicy instruments (money supply, interest rate, exchange rate and liquidity ratio) in enhancingeconomic growth of the country within the period considered. To identify the stationaritycharacteristics of the data employed in the empirical investigation, various advanced econometrictechniques like Augmented Dickey Fuller Unit Root Test, Johansen Cointegration Test andVector Error Correction Mechanism (VECM) were employed and the following informationsurfaced: None of the variables was stationary at level meaning they all have unit roots. But allthe variables became stationary after first difference with the exclusion of money supply.However, all the variables became stationary after second difference. Hence they were integratedof order two. The cointegration result indicated that there is long run relationship among thevariable with two cointegrating vectors. The result of the vector error correction mechanism(VECM) test indicates that only exchange rate exerted significant impact on economic growth inNigeria while other variables did not. Equally, only money supply though statisticallyinsignificant possessed the expected sign while others contradicted expectation. The studyconcluded that monetary policy did not impact significantly on economic growth of Nigeriawithin the period under review and that the inability of monetary policies to effectivelymaximize its policy objective most times is as a result of the shortcomings of the policyinstruments used in Nigeria as such limits its contribution to growth. The study recommendedamong others that Commercial banks and other financial intermediaries must be forced to ensurecompliance with the stipulated prudential guidelines.

Article Details

Monetary Policy and Economic Growth of Nigeria ( 1981 - 2012 )

Authors:

Udude Celina C.

Publisher:

Centre for Social Science Research

Main Topics:

Economics and Finance

Journal:

Journal of Policy and Development Studies 2014 Vol.9 Issue 1, pp.234-247

Document Type:

Article

Publication Date:

11/2014

Document Language:

English

Document ID (Org No.):

63625

Frequency:

Quarterly

pISSN:

15979385

DOI:

10.12816/0011194

Descriptors:

ECONOMIC POLICY

MONETARY POLICY

ECONOMIC DEVELOPMENT

COMMERCIAL BANKS

INTEREST RATES

EXCHANGE RATE

NIGERIA

Monetary Policy

Monetary Policy

Commercial Banks

Financial Intermediaries

Interest Rate

Exchange Rate

Issues

Article Details

Authors: Udude Celina C.

Publisher: Centre for Social Science Research

Main Topics: Economics and Finance

Journal: Journal of Policy and Development Studies 2014 Vol.9 Issue 1, pp.234-247

Document Type: Article

Publication Date: 11/2014

Document Language: English

Document ID (Org No.): 63625

Frequency: Quarterly

pISSN: 15979385

DOI: 10.12816/0011194

Descriptors:

Issues

Authors:

Udude Celina C.

Publisher:

Centre for Social Science Research

Main Topics:

Economics and Finance

Journal:

Journal of Policy and Development Studies 2014 Vol.9 Issue 1, pp.234-247

Document Type:

Article

Publication Date:

11/2014

Document Language:

English

Document ID (Org No.):

63625

Frequency:

Quarterly

pISSN:

15979385

DOI:

10.12816/0011194